Drasc, Inc., et al. v. Navistar International Corporation, et al.

Federal Rule of Civil Procedure 23(c)(2)(B) mandates that unnamed class members be given the right to “opt out” of a class settlement after a court’s preliminary approval. To adequately protect the unnamed class members’ due process rights, courts including the Second and Tenth Circuits follow the Reasonable Indication Standard for determining whether a class member has sufficiently expressed a desire to opt out. Here, the Seventh Circuit has rejected the Reasonable Indication Standard and replaced it with a standard that demands mechanically rigid compliance with the district court’s prescribed optout procedure. The questions presented are:

1. Does an unnamed class member who provides reasonable indication of its intent to be excluded from the class settlement sufficiently opt out (as two circuits have held), or must the unnamed class member rigidly adhere to the district court’s opt-out procedures (as one circuit has held)?

2. Must a district court analyze an unnamed class member’s claim of excusable neglect for failing to follow the class settlement opt-out procedure under this Court’s four-part test in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, (1993)?